Co-Operative Energy onthe Price Rise Band-Wagon

By Cynthia Taylor

Co-operative energy opened its doors May 2011; four months later announced price increases that are above inflation of 18% for gas and 11% for electricity.

The company who describes themselves as the ‘ethical energy provider’ has said that it had no choice but to increase prices using the same reasons as the Big Six of increased wholesale energy markets. 14,000 customers will be affected by these price increases.

Consumer Focus groups said that the increases are ‘unwelcome but not unexpected’ and will come in to effect on the 3rd November 2011.

Co-operative Energy promised its customers a simple, single tariff that was competitive and consistently fair. The company claimed they will challenge the ‘fat profits’ that are being made by the Big Six energy companies. They said they will do this by including a bi-yearly profit sharing deal for its customers who they say will own the business.

At the launch of the energy company, Nigel Manson stated that complicated tariffs, unfair contracts and changing prices had bamboozled customers and he said that it had to stop!

Mr. Mason said that it was the last thing they wanted to do, increase prices, but they were affected by the exact same pressures as everyone in the energy industry. He said that they had held off as long as they could but were also affected by increased wholesale prices, increased government levies that are funding national policies such as renewable energy, and increased charges for distribution of energy were factors that affected their decision.

Consumer Focus, Audrey Gallacher, energy director of the group, this new price rise highlights that people will have to cut costs this coming winter, she added that consumers should look for cheaper tariffs as well as looking at how they can make their homes more energy efficient. She suggested that customers look at paying by direct debit instead of cash or cheque which will help lower energy bills.

Consumer Focus wants government to step in and

Reform the energy market

Introduce clear cut measures which include a competition review

Improve bill transparency

Strategies to help customers cut their energy bills

Help those in fuel poverty

Put an end to cold calling door step sales

Put an end to confusing and complex tariffs

And for the big energy suppliers to treat their customers fairly

During September EDF’s chief executive of energy had admitted that the public no longer had confidence in the energy industry and said that a Competition Commission enquiry was needed to clear the air.

Chris Huhne followed this by stating that Government would look at fresh powers to compensate customers that are victims of ‘anti-competitive practices’.

Mr. Huhne plans that energy companies are to be stripped of their ability to be able to impede Ofgem, the energy regulator’s action to force a second opinion from the Competition Commission. He said that Ofgem will have powers to impose decisions and the energy companies will be able to appeal.